The Unhealthy Financial Behaviours That Damage Your Business

30 Sep 2022 | Biz Finances

Adapting and embracing change are hallmark traits of a successful entrepreneur.

Updating procedures and equipment, or upgrading services and products are part of the continual innovation process.

But… have you considered that behaviour patterns might also need an upgrade? As the driving force behind how you operate as a business owner, they too need to adapt.

Hand-in-hand with behaviour patterns are habits that we settle into – some with potential negative impacts that would keep you from achieving success. If you haven’t already, take a moment to read our blog, Ten Tips to Improve Your Habits and Business to get a refresher on identifying, and busting outdated business habits.

Our relationship with money is shaped by beliefs rooted in childhood, and are expressed as behaviour patterns, for better or for worse. How we relate to money on a subconscious level naturally influences how we deal with finances in our business.

But luckily, just as we can identify and change defeating habits, unhealthy financial behaviour patterns can also be turned around. Think of the process as financial behaviour 2.0!


Common Patterns That Can Defeat Success

“Successful people do what unsuccessful people are not willing to do. Don’t wish it were easier; wish you were better.” – Jim Rohn, entrepreneur

Identifying your behaviours is the first step to getting control of your finances. And as the quote above suggests, although it might not be easy, a willingness to better yourself is half the battle.

Do you identify with any of these patterns below? We all have areas that can creep up and cause a range of problems, depending on the scale and scope of their influence. From minor impacts such as keeping your business in a rut, to major financial damage, any of these behaviour patterns can cause stagnation to full-on havoc.

  • Avoiding the financial side of your business.

Unless you’re in the finance industry or have a natural aptitude, you likely went into business for other interests other than dealing with money. Maybe you’ve gotten really clever at dodging, evading, procrastinating, and just outright ignoring your business’s finances altogether. This can result in all manner of unhealthy behaviours that can one day catch up with you. Whether it’s remaining blissfully unaware of your numbers, un-checked spending on unnecessary expenditures, or avoiding raising your prices, the behaviour pattern of avoidance will manifest one way or another.

  • Abdicating financial responsibility.

The saying ‘pass the buck’ takes on extra meaning when it refers to handing over responsibility for your finances to someone else.

We’ve emphasised before how important delegating is to run your business, but the extreme end of delegating can slip into abdication. Relinquishing responsibility of the finances to your accountant, spouse or a manager disempowers you to better lead and manage your business. Only when you understand the numbers in your financial statements, balance sheet, budget and cash position are you in control, and can then make informed decisions.

  • Spending recklessly or haphazardly.

Often our spending behaviour has its roots in personal spending, and carries over to business. As the leader of your team, the behaviour of unstructured spending sends the wrong message to your employees, who’ll be influenced by you to adopt the same haphazard approach. The spiralling consequences can result in a lower perception of the value of resources as easily expendable. It starts with you setting the example, and your team will follow.

  • Avoiding risk.

Have you missed out on opportunities because of risk aversion? Whether it’s launching a new product or website, or investing in new marketing, financial risk comes with the territory of business ownership. Although being risk-averse by nature might be regarded as a healthy behaviour, it can subtly influence your decisions when risk is needed to evolve. So while it’s wise to be cautious about taking on debt, for example, strategic risk is necessary to grow, and is a key area where a business advisor can guide you.

“The biggest risk is not taking any risk.” – Mark Zuckerberg, co-founder of Facebook


Give Your Financial Behaviours a Reboot

Being willing to bust unhealthy financial behaviours is only the first step, and seeking help to do that is a sign of strength, not weakness!

If you’re ready to proactively manage your finances and be more empowered running your business, the team at BW Miller Dean are here for you. Contact us to get started.